The chief executive of Westminster council, Mike More, has hit out at government's strategy for local government, warning that council autonomy is being undermined by Whitehall policy.

Speaking at the Guardian's fourth Local Government Leaders Quarterly event in London earlier this month, More said proposals on planning and community engagement were not working well for authorities. "I don't understand what the government is doing on planning at the moment. I don't understand what they're achieving," he said.

More warned authorities that plans to allow office blocks to be converted to housing would pose a fundamental problem for Westminster council, as it would damage the value of property in the borough. He also raised concerns about the Department for Communities and Local Government's community budgets policy. "I would say there are two things wrong with community budgets: one is community and the other is budgets. It actually isn't budgeting and it's not for the community," he warned.

More – who has argued that, despite budget cuts and policy overhauls, local government will survive and flourish – criticised the previous Labour government's local government policy, saying funding for council services had focused on process rather than outcomes. This forced local people to become dependent on councils instead of helping themselves, he claimed.

More was joined by Derrick Anderson, chief executive of Lambeth council and the Guardian public servant of the year; Lesley Seary, chief executive of Islington; and Adam Oliver, head of corporate social responsibility at BT, a supplier to councils.

Seary echoed Westminster's concerns about councils' attitudes towards the people they serve. She said authorities must work more collaboratively with local people, adding that in the past "we assumed what was best for people, and I think we need to listen to what people think is best for them and work with them. In times of far less money you save money by listening to what people want."

Seary also highlighted the image problem Islington faces; despite assumptions about the borough's wealth it has the second highest rate of child poverty in the country. Fearing the area could become home to only those with enough money to afford high rents, Seary told leaders the government's 80% affordable market rent proposal is "not feasible and not realistic" in the borough. "That means we have to be incredibly creative about how we keep a mixed community here," she said.

Anderson said councils must adapt to survive, but the challenges they face are nothing new.

He told the audience of local government senior managers that the "real challenge is the scale of the task in front of us. In my own authority our projection is that by the end of 2016-17 we'll have lost 50% of our spending power relative to 2010. I don't think that that's a disaster, actually I think that in many other places too, we will find appropriate survival strategies."

Oliver said lessons could be learned from the private sector, particularly about communicating with the community while moving towards a digital future. "You must always think, with the new things you do, that you don't exclude those people," he said. He also said councils must encourage staff to feel good about their jobs, with morale boosting schemes help staff feel included during periods of change.

Click here to find out more about the next series of quarterly meetings in 2013. This quarterly event was designed and produced by the Guardian to a brief agreed with event sponsors BT, Serco, Solace and Trowers & Hamlins